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Managing America: Taxes

TheWeekInCongress.com (TM)

Week Ending April 20, 2006

H.R.1677 To amend the Internal Revenue Code of 1986 to enhance taxpayer protections and outreach.

The bill takes aim at several provisions of the tax code with the purpose of improving taxpayer’s opportunities to deal with or avoid IRS errors, notifying taxpayers of unauthorized use of the taxpayer’s identity and protecting them from online fraud related to paying taxes.

Married couples filing jointly may file their family business activities as a qualified joint venture but not as a partnership and all gains and losses will be divided equally between them in relation to the percent of the business they own.

The IRS is directed to notify taxpayers if, in the course of an investigation, the Secretary determines there was or may have been unauthorized use of the taxpayer’s identity or that of the taxpayer’s dependents. Taxpayers would also be notified of eligibility for the earned income tax credit. The EITC has been responsible for some confusion when filing leading to numerous audits revealing errors.

If the IRS wrongfully seizes property the time to return it is extended from nine months to two years. The regulation applies to future levies. The opportunity to bring a civil suit against the IRS for the wrongful levy is also extended to two years.

Taxpayers may re-contribute to their IRAs, without penalty or limitation, any amounts wrongfully levied by the IRS.

Predatory lenders will not be given information on taxpayers for a loan based on anticipated tax refunds. Use of Treasury department logos is prohibited to help prevent online fraud through e-mails attempting to pose as the Treasury Department in order to get taxpayer data from the taxpayers.

The IRS is authorized to use what ever media venue it wants to notify taxpayers of unclaimed refunds.

The Secretary may disclose to the head of the Federal Bureau of Prisons any prisoner tax returns though to possibly be a false return.

Sponsor:  Rep. Charles B. Rangel (D-NY-15^th)

Vote: Passed House 407 to 7 April 17, 2007 (RC 214)

Cost to the taxpayers: "The Joint Committee on Taxation (JCT) estimates that enacting H.R. 1677 would decrease revenues by less than $500,000 in 2007, by $6 million over the 2007-2012 period, and by $16 million over the 2007-2017 period. The Congressional Budget Office (CBO) estimates that enacting the bill could increase federal revenues and direct spending as a result of the collection of additional civil and criminal penalties assessed for misuse of Treasury names and symbols. CBO estimates, however, that any additional revenues and direct spending that would result from the penalty provisions would not be significant. CBO also estimates that implementing the bill would cost $2 million to $3 million annually, subject to appropriation of the necessary amounts."

Earmark Certification:   Not applicable to this bill.

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